- The Washington Times - Tuesday, February 22, 2000

Attorneys for Microsoft Corp. and the Department of Justice will return to court today to make final arguments in the federal government’s antitrust case against the software giant.
A ruling against Redmond, Wash.-based Microsoft could fundamentally change the way consumers buy and use the software needed for computers. Microsoft’s Windows operating system is installed in 90 percent of the world’s personal computers.
The two sides are still negotiating in Chicago to reach a settlement, but sources indicate little progress. U.S. District Judge Thomas Penfield Jackson, who appointed a mediator for the case, has strongly urged the sides to settle.
“They’re just too far apart,” said Jonathan Zuck, president of the pro-Microsoft Association for Competitive Technology in the District of Columbia.
Judge Jackson ruled Nov. 5 in his “findings of fact” that Microsoft is a monopoly, that it used its status to protect itself and harmed consumers.
But the judge hasn’t ruled whether the company broke antitrust laws. That decision is expected within the next two months and could trigger a lengthy appeals process.
“It’s a very long way home,” George Washington University antitrust expert William Kovacic said.
Lawyers for the Justice Department and 19 states suing Microsoft will argue today that Judge Jackson should conclude the company illegally protected its monopoly on personal computer-operating systems.
Microsoft will argue Windows was the choice of consumers because it is a superior product, and that having a popular product doesn’t make it a monopoly.
Judge Jackson will give each side 90 minutes today to make arguments and 15 minutes to respond to the opponent’s claims.
If the judge finds Microsoft broke the law, he would hold hearings to determine a penalty.
That could become unnecessary, of course, if the two sides settle their dispute out of court. On Nov. 19, Judge Jackson appointed Judge Richard Posner, chief judge for the 7th U.S. Circuit Court of Appeals in Chicago, to serve as mediator and help the two sides settle the case.
Settlement talks will continue with Judge Posner, despite today’s arguments before Judge Jackson.
But a settlement is unlikely, antitrust lawyer John Christie said.
“I’d have to say it’s less than 50-50. I don’t have any sense that they’re close,” he said.
The Justice Department reportedly wants to break Microsoft into two or more companies, and it has floated a proposal to turn the company into “Baby Bills.”
Microsoft gave an outraged response last month to news leaks about the federal government’s plan. Steve Ballmer, the chief executive appointed to manage the company’s day-to-day operations by co-founder Bill Gates, said at a news conference announcing his promotion that a forced breakup would be reckless.
“I think it would be absolutely reckless and irresponsible for anyone to try to break up this company,” Mr. Ballmer said. “I think it would be unprecedented, and I think it would be the single greatest disservice that anybody could do to consumers in this country… . I just think it would be reckless beyond belief.”
After Judge Jackson’s findings of fact, both sides in the case were required to file opinions on how the law should be applied. In addition, briefs were filed by others on behalf of parties involved in the lawsuit.
In its friend-of-the-court brief for Microsoft, attorneys for the Association for Competitive Technology emphasized the government hasn’t proven the company broke antitrust laws.
The Software and Information Industry Association, a D.C.-based industry group that opposes Microsoft, wrote on behalf of the Justice Department that Microsoft’s conduct proves it violated antitrust laws.
Former U.S. Supreme Court nominee Robert Bork wrote to the court, on behalf of the 19 state attorneys general, that Microsoft needed to preserve Windows’ monopoly status and protect it from the competitive threat posed by Netscape’s Web browser, Netscape Navigator, since that browser could have been used as a rival platform.
In another possible remedy if the company is found guilty of breaking antitrust laws, Microsoft could be forced to license the code for its Windows operating system. That would let competitors develop their own versions of the software.

This article is based in part on wire service reports.

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